Hellaby FY profit falls 5.8 percent, meets guidance; Contract helps lift sales
Hellaby Holdings [NZX: HBY], the diversified investment company, posted a 5.8 percent decline in full-year profit, meeting its guidance, on weaker results from its footwear stores.
Profit fell to $18.2 million in the 12 months ended June 30, from $19.3 million a year earlier, the Auckland-based company said in a statement. Sales gained 9.7 percent to $546 million, helped by a three-month contribution from its 85 percent-owned oil and gas services business Contract Resources.
Hellaby acquired control of Contract for about $73 million in April, with the remaining 15 percent owned by that company's managers. A month earlier it raised $50 million in a placement and share purchase plan to help fund future acquisitions it says will drive earnings growth.
"We believe the next significant lift in profitability will come from further acquisitions," said managing director John Williamson. "We have a solid ongoing pipeline of opportunities under review and with an exceptionally strong balance sheet are well positioned for our next stage of growth."
Gearing rose to 17.8 percent including debt taken on to fund the Contract purchase, from 6.3 percent in 2012, still well below its ceiling of 45 percent.
The footwear division, which includes Hannahs, Hush Puppies, pulp and number one shoes, reported a 5.5 percent decline in sales to $154 million, while earnings before interest and tax dropped to $6.1 million from $8.4 million in what it said were "very difficult trading conditions."
Automotive, its biggest division, lifted sales by 1.6 percent to $170.6 million and posted little changed EBIT at $20.2 million. The Equipment division had a 16 percent increase in sales to $134.6 million, while earnings climbed to $5 million from $4.5 million.
Packaging sales fell 8 percent to $44.7 million and EBIT dropped to $2.7 million from $3 million. Contract made a three-month contribution of $41.2 million and earnings of $3.7 million.
Contract is forecast to contribute earnings before interest, tax, depreciation and amortisation of $20 million in the 2014 year.
The company will pay a final dividend of 8 cents a share, making total payments for the year of 13 cents, from 10 cents a year earlier.
The shares fell 0.7 percent to $2.86 and have declined 14 percent this year.